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Tuesday, 23 August 2016

Asia stocks edge up amid Fed lull, oil slips

A survey of Japanese manufacturing activity showed signs of steadying in August as output rose for the first time in six months, but the improvement was marginal and had little impact on stocks.

The IHS Markit/Nikkei Japan Flash PMI rose to 49.6 in August from a final 49.3 in July. More flash surveys are due from Europe and the United States later in the day.

The whole world seems to have hushed ahead of comments from Fed Chair Janet Yellen at the central bank's annual meeting in Jackson Hole on Friday. Investors still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that equanimity.

"Ever so slowly, the market does seem to be reluctantly acknowledging the chorus of senior Fed speakers who have suggested recently that a 2016 rate hike is still quite probable and September is 'live'," wrote analysts at ANZ in a note.

Of the 479 companies in the S&P 500 that have reported earnings, 71 percent have topped expectations, according to Thomson Reuters data. Earnings are currently showing a decline of 2.3 percent for the quarter.

In forex markets, the dollar slipped 0.15 percent to 94.381 against a basket of currencies .DXY. The index fell about 1.3 percent last week on what traders perceived as mixed signals from Fed officials.

The dollar drifted as low as 100.03 yen JPY= in early trade and spent much of the session hovering just above that psychological bulwark. The euro was a shade firmer at $1.1336 EUR=.

The New Zealand dollar blipped higher after the country's central bank forecast another 35 basis points in possible rate cuts, less than many investors had wagered on.